Its June.
The rally continues - the government said
that job growth is up (though they usually revise
their early figures much lower in a month or so), core
inflation was lower than expected and the manufacturing
index shows a bit of expansion.
So the media says that with moderating inflation and a
bit of economic growth the futures looks good so the market
go up.
At the same time the interest rates on the 30-year note
closed above 5.5% and the 10-year at 4.95%. This has
yet shown no signs of pulling money out of the market but it
may.
Briefing.com reports a couple of other things Friday that
helped the markets: Dell posted better than expected first quarter
results, Wal-Mart announced a $15 billion share repurchase plan, and the
Bancroft family is reportedly now open to considering a
buyout offer for Dow Jones from Rupert Murdoch's
News Corp.
"The combination of these developments succeeded in
keeping selling efforts in check, as did the expectation
that Monday will be highlighted by another round of deal
making."
And the sector graph shows that the metals and mining
ended up the big winners as they had been in pullback
mode until later this week.
Our three Special Situation
stocks had a constructive week and all ended nicely up on
Friday's session with NNRF up 16%. It had broken over the
down trend line but on minor gains and average volume but we
showed it in the Friday morning video and guess that many
realized a good time to buy or add to existing positions. Volume
increased significantly. You can see there looks to be some
resistance at the $7 area but when that does clear we can go to
test the April highs. A slower move back up than the last time
would be a plus. The chart shows 5 green candles in a row and
has not done that since last August so do not be surprised by
some more consolidation though I expect the price to be higher
in next week's newsletter.
CYRX had a successful
test of the $1.70 break out support line as well as the 50-day
EMA and that brought buyers back in on increasing volume. Just
the action one likes to see. This basing is very healthy and it
is fine to have a little patience as the company needs to ramp
up production. This waiting sideways time will be more than made
up for in my opinion with excellent upside gains.
CFPC was similar in that
it also ran up too fast the first time so needed to pullback,
consolidate and shake out the weak hands. After its trend line
break last Friday it has added about 35% this week. We know that
the company controls about 30% of the Jamaican Blue Mountain
coffee, some of the best in the world, and that they want to
increase this amount. We have heard from third parties not
connected with the company that they will be successful in this
so we will watch for any company news on this. The company did
have news this week that they have
retained
BB&T Capital
Markets to work with them and we view this as
a positive as any additional money could help them to expand
roasting which could greatly increase earnings and or allow them
to add additional coffee supplies. Now with the close back over
$2 again we start the 10 day count - as when they have closed
over $2 for 10 days they can apply for the move to the AMEX.
Just bringing this small stock
to your attention. Viking Power VKPW is a company who
does power plant repair in the Mid-Atlantic
region. They are profitable and are completing an acquisition
now that will significantly increase their revenues and
earnings. Their business plan is to continue to acquire small
power plant service companies to consolidate them in the
Mid-Atlantic region. The stock is now above
the 50-day support and is low volume so not one to chase but if
interested, to buy on weakness in the current range. There is
more information on the following page.
http://stocktiger.com/vkpwextra0406.php
I now do an audio update each
day about and hour or two after the market opens mentioning the
stocks that have broken out and ones that look like they may or
others of interest.
If you wish to be notified by email on this and other audio
updates just send a note to
audioupdate@stocktiger.com
A look at the Dow as
it reaches new highs. The Fibonacci placement as you may know is
something I like to do sometimes and is using the March low and
placing the 62%, 50% and 38% at likely support to see it this
may project a top. It is showing a possible 13712 top at the
moment. Of course a break out here could simply move up all the
other % areas up but as the index now is so far above the 50-day
EMA it is in a likely pullback area now. One thing to note is
that as the markets have been making new highs the number of
stocks making news highs has gone down so less stocks are
participating.
The transports have just broken out but note the volume is declining in the
break instead of expanding.
The Nasdaq formed a reversal candle on Friday as it also traded totally
above the top Bollinger band. A pullback here should begin on Monday or Tuesday.
The degree cannot be known yet but it is overbought for sure.
The Russell 2000 has been very impressive after a week ago when it looked
so wimpy and unable to make new highs.
Since its trend line bounce last week the NYSE has been doing well also.
RSI is near the over bought area though it can hold there a while and
stochastics are high. Breaks in those below their support line would signal a
pullback.
The S&P 500 has made a new monthly closing high (if the month ended
today) and it is far above its 20-month EMA. The intra day high in 2000 was 1553
so will be interesting if it can tag that price as I would suppose many are
waiting to short at that level.
Not sure what to say about this ratio chart - as it goes up it shows that the
Nasdaq is outperforming the S&P 500 and that is generally good for
the market as the tech sector is important. Now we know that the Nasdaq is
overbought and this chart shows shows that it is now at resistance which if
unbroken means the Nasdaq should start to underperforms the S&P.
The semiconductors had gone to resistance and pulled back to the 38% retrace and
break out support and then rallied but it has been on lower volume so we expect
no break out soon.
This is the 10-year to 3-month yield curve now in positive territory above 10
(1) It is very common after a yield curve has been inverted that that its move
back to the "plus side" happens very quickly once it starts.
And here is the 30-year bond
back paying over 5.5% as the number shown on this chart needs to
be divided by 10 to get the rate. They may be over bought but
also had the golden cross as we expect it will not be long until
some switch from stocks into bonds.
Gold had broken below its trading channel but dad formed a base at the
38% and rallied nicely this week. Once again the stochastics showed the buy as
it moved back over 20.
This is a monthly chart but still the Dow is outperforming gold.
And the US dollar not yet able to climb above the overhead resistance.
Economic calendar from
Briefing.com
Additions to our watch list:
EMU was on the list in the past and
has been consolidating nicely so could break above the $17.40
level.
RADS right at the $14.00
break.
NEXC
did have a failed try and may need some consolidation before
trying a move over $13.18
DVR over $16.00.
(remember when they are so close to a break out area that a
break at the open can often cause whipsaws.
BNE do not like the sell
off volume but price has held up so on a brake over $19.51
AZPN over $15.55
AMKR over $14.71 and maybe the lower $14.55
level
DTPI into the gap at
$13.50.
WMAR - the time may not
have been long enough but often the long red candles on the left
offer little resistance. (though it works better if several
months have passed) Anyway over $15.00 to the 50-day at $15.24
to start and see how it goes.
Some areas of Moscow have the
typical apartment blocks of large cities but usually also have
green space or in this case a nice body of water nearby.
That's a full lid for today - will see you all
during the week.
Check the
Earnings Calendar
on all overnight holds.
Check the current
message board also for other good
stock candidates as there are several there right now.
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